More on the Guarantor! Hedging the Risk: The Guarantor – Only If Handled Correctly!

The pandemic create many winners and losers, which means, millions of credit facilities, debtors, and borrowers remain on the brink. Scratch the surface, and you realize that forbearances have delayed what appears to be inevitable.  Despite the trillions in government help, the fundamentals don’t change.  Lenders have for eons collateralized loans with tangible, value-sustaining real estate as a way of hedging their risk.  Even then, guaranties are garnered as the ultimate mechanism to assure engagement by the principals and as a last resort “safety feature” if the collateral’s value under performs at auction. 

Between the closing and the moment an asset or loan portfolio manager realizes they may have to go after the “guaranty” on a non-performing loan, there may be a span of many years.  Yet, not surprisingly, that moment upticks dramatically in challenging times (which may still be on the horizon for today’s CRE or, possibly and unbeknownst to many, already here).  

Charged with managing millions, including navigating the minefields of non-performing loans, asset managers turn to law firms or specific lawyers. In this regard, this is where experience counts.  Yes, who your lawyer is does matter.  Experience means we’ve learned the lessons needed to navigate the process, anticipate the defensive maneuvers, and chart a path to meeting the objective.  Yet, with the law seemingly a “moving target” at times, we also stay attuned to current legal developments through case law and statutes.  Utilizing this approach means we bring this blending of key factors to clients who appreciate the dynamic and value.  In this way, we are always attuned to “nuggets” that we can utilize to help our clients successfully navigate the commercial foreclosure legal challenge that otherwise, disrupts or negatively impacts their loan portfolio returns.

I was reminded of all this recently while our team was reviewing and discussing case law updates.  The recent 2nd DCA opinion in the case styled, Taneja v. First St. & Fifth Ave., 2021 Fla. App. 2nd DCA, Case No. 2D20-679 (1/29/2021), offers a lesson and simple reminder — critical decisions are made early, mid-way, and late in all foreclosure litigation cases – and they can make a world of difference.  

In the Taneja case, the Plaintiff’s lawyer filed the foreclosure lawsuit against the borrower, guarantors, and those with liens against the subject property.  For some reason, Taneja, both a guarantor and lienholder, was only sued as a lienholder.  Plaintiff lender ultimately obtained a final judgment of foreclosure; however, at auction, the sale failed to recover the entire debt afforded by the final judgment.  Plaintiff’s counsel then proceeded to, and did obtain, a deficiency judgment for the difference against Taneja.  On appeal, the appellate court’s review of the trial court proceedings revealed an error.  Specifically, the fact that “Taneja was only named as a defendant in the foreclosure action because of his status as a lienholder on the real property.”  The only guaranty count in the complaint omitted Taneja.  Thus, “no claim for monetary relief was ever pleaded against Taneja on the guaranty.”  Conclusion?  The deficiency judgment entered against Taneja was reversed.

It is inexplicable why Taneja was not sued on the guaranty, but, the fact is, he was not.  At RLG, you can bet guarantors get our time and attention – always.  Experience, focus, and engaged attention to detail make all the  difference.  Yes, who your lawyer is, counts.

If you’re an asset manager, law portfolio manager, private lender, or investor anywhere in the country grappling with non-performing Florida commercial real estate and you need a legal team with a state-wide reach to handle your commercial foreclosure work – we can help.  Feel free to gives us a call at 954-369-1993, or email me at

At the Reyes Law Group, we not only defend your investment, but preserve your rights, and value your trust – every single day.

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Reyes Law Group

Reyes Law Group represents clients in a multi-disciplinary legal practice involving real estate transactions and litigation with a “footprint” that covers the State of Florida. Over the firm’s first 10 years, Reyes Law Group has closed over $100M in commercial closings, representing buyers and sellers in contract negotiations, due diligence, and the related title review and policy issuance related to closings. In litigation, the firm has commercial litigation experience focused on prosecuting or defending claims such as breach of contracts, partition actions, trade secret violations, and breach of non-competes. However, our firm’s MAIN FOCUS is assisting asset and loan portfolio managers, investors and private lenders with a “ 4-PILLAR APPROACH” to the legal challenges they face with non-performing assets: 1) LOAN WORKOUTS; 2) COMMERCIAL FORECLOSURES (across the State of Florida); 3) COMMERCIAL EVICTIONS; and 4) REO COMMERCIAL CLOSINGS.30+ years’ legal experience means - WE CAN HELP!

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